Medicare eyes hospice savings

Thirty years after its inclusion as a Medicare benefit, hospice is having a bit of a midlife crisis.

Changes in whom it serves, where it serves them and for how long are affecting the bottom line, in ways that may accelerate trends that are already reshaping end-of-life care.

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Now, the hospice industry — which gives dying patients and their families care from an interdisciplinary team that may include doctors, nurses, chaplains, social workers, home aides and volunteers — is facing two separate rounds of cuts. And some researchers and advocates worry about the repercussions.

Hospice faces about $7 billion in Medicare payment reductions over a decade under the health care reform law. On top of that, the summer’s debt reduction deal will trigger a 2 percent cut in 2013 — unless the deficit supercommittee reaches its own agreement.

The Affordable Care Act requires the Department of Health and Human Services to review — and allows it to revamp — payments to hospice. The Medicare Payment Advisory Commission, among others, has already weighed in with alternatives either calibrated to how long a patient receives hospice care or tied to the place of care — whether it’s at home or in a nursing home.

Since the end-of-life-care benefit was added to Medicare in 1982, hospice has evolved from a movement into an industry. Now, about half of hospices are for profit. Some are small, locally owned businesses, but much of the recent growth has been in big, publicly traded national chains, one of which is owned by the company once known as Roto-Rooter.

The patient population has changed, too. In the early days, most had cancer. Now, one in three has cancer, about 18 percent have heart or circulatory disease and 17 percent have dementia, Alzheimer’s or similar neurological disorders.

Even cancer has changed. Patients may live a long time with certain cancers, even if they aren’t cured. And it’s often hard for a doctor to accurately predict whether a patient is likely to die within six months — the threshold for hospice care. Many doctors have trouble communicating distressing news or helping patients and families understand the burdens versus the benefits of further aggressive treatment.

According to a June 2011 MedPAC report, the number of people getting Medicare hospice care doubled from 2000 to 2009, to more than 1 million, or about 40 percent of deaths. Total payments quadrupled, from less than $3 billion in 2000 to $12 billion in 2009.